Posts tagged ‘US crude’

US Energy Secretary Rick Perry’s recent claim that energy independence is within reach overlooks a fundamental principle of interconnected global trade: Producing countries need security of demand as much as consuming countries need security of supply.

While the US Energy Information Administration projects the US will become a net energy exporter within the next few years, as it already is for natural gas, the country will still need to buy heavier and sourer crude to blend with its lighter sweet grades and will be reliant on the political and economic relations it fosters with other energy suppliers.

As oil prices recover from the lows of 2014, US shale producers face a choice: continue to invest in record production or start returning cash to investors who helped them weather the downturn.

It used to be that investors rewarded US upstream operators that could quickly grow production. More crude output growth per quarter separated oil patch E&P champions from the rest of the pack. That paradigm came under pressure starting in 2014, when prices plunged and common wisdom said producers would curb output and ride out the storm.

The US crude blend LOOP Sour was heavier and more sour in October, despite a month-on-month decrease in heavy sour imports of Iraqi and Kuwaiti crude grades.

The oil terminal allocates one of its eight underground caverns to a medium sour blend comprised of US Gulf of Mexico grades Mars and Poseidon and a blend of Middle East crudes called Segregation 17, which is comprised of Arab Medium, Basrah Light and Kuwait Export Crude.

Choking back the flow of crude to boost prices was an easy decision for OPEC and Russia to make last year when inaction would have almost certainly led to economic oblivion. After Brent closed Friday above $60/b—its highest level in two years—deciding how and when to reopen their spigots without causing the oil market’s equivalent of a taper tantrum looks much harder to achieve.

The Africa Oil Week conference in Cape Town got a taste of Texas or even a little slice of Hollywood this month, as the presence of US Secretary of Energy Rick Perry as guest of honor, perplexed yet impressed the conference delegates.